Britain’s government has pledged to cut energy bills by £50 a year, via a series of measures, while a number of the UK’s ‘Big Six’ energy companies have revealed that they are either slashing household bills or not raising prices until 2015. (Photo: Reuters)
Britain’s government has pledged to cut energy bills by £50 a year, via a series of measures, while a number of the UK’s ‘Big Six’ energy companies have revealed that they are either slashing household bills or not raising prices until 2015. (Photo: Reuters)

The government has pledged to cut energy bills by £50 a year, via a series of measures, while a number of the UK's 'Big Six' energy companies have revealed that they are either slashing household bills or not raising prices until 2015.

Energy minister Ed Davey said fuel poverty subsidies would be moved into general taxation and some green policy targets would be slowed down as homebuyers could instead be granted £1,000 to spend on energy-saving measures.

The government measures also included a reduction in the Energy Companies Obligation (ECO), which requires energy companies to provide insulation or other energy-saving measures to 400,000 homes a year.

The Big Six account for 99% of the UK's energy sector.

Npower said it would not raise prices any more until spring 2015, unless wholesale costs go up, and EDF promised to adhere to the same pledge.

SSE and Centrica have said they will also pass on cost reductions.

British Gas said it was dropping household gas and electricity prices by an average of 3.2% and that these price reductions would take effect from 1 January.

Centrica, British Gas' parent company, said: "This price cut is based on the assumption that the government's proposed changes will be implemented in full."

SSE said it would cut household bills by 4% this winter.

Energy Prices: The Political Football

Last week, reports circled that the government was pleading with the Big Six to freeze prices until after the general election in 2015.

The latest series of announcements indicated that the coalition was successful in reversing some of the political damage it had incurred from shouldering the blame for further price rises because of its green levies, which are passed on to the consumer.

In September, opposition leader Ed Miliband pledged to freeze energy prices until 2017, if the Labour Party wins the general election in two years.

His suggestion was heavily criticised by the government and energy firms, who claimed it would lead to blackouts and halt much-needed investment in the country's creaking infrastructure.

The industry blames spiralling consumer energy bills on infrastructure investment, volatile wholesale costs, and green taxes levied by government. Critics of the industry point to the billions of pounds made in profit and say rising bills are more about lining shareholders' and bosses' pockets.

Energy UK, the body which represents the Big Six, has warned that the debate surrounding the industry as bills rise and politicians threaten intervention is putting much-needed investment at risk.

"The UK needs major investment in energy over the next few years to modernise our power stations, investment in greener, more sustainable power and upgrade the wires and pipes," a spokeswoman for Energy UK said.

"We all need to work together but the current public debate - where all we hear is claim and counter-claim - risks scaring vital investment away."